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CIRCULAR No. 07/2006/TT-BTC OF JANUARY 20, 2006, GUIDING THE FINANCIAL REGIMES APPLICABLE TO NHON HOI ECONOMIC ZONE

Pursuant to the State Budget Law;

Pursuant to the tax, charge and fee laws and ordinances;

Pursuant to the Prime Minister's Decision No. 141/2005/QD-TTg of June 14, 2005, establishing Nhon Hoi Economic Zone, Binh Dinh province, and promulgating its operation Regulation;

The Finance Ministry hereby guides the financial regimes applicable to Nhon Hoi Economic Zone as follows:

I. GENERAL PROVISIONS

1. Scope of application:

The financial regimes and customs procedures specified in this Circular (hereinafter collectively referred to as financial regimes) apply to Nhon Hoi Economic Zone (hereinafter abbreviated to Nhon Hoi EZ) which covers a land area of around 12,000 hectares, embracing the communes of Nhon Hoi, Nhon Ly and Nhon Hai and zone 9 of Hai Cang ward of Quy Nhon city; part of Phuoc Hoa and Phuoc Son communes of Tuy Phuoc district; and part of Cat Tien, Cat Chanh and Cat Hai communes of Phu Cat district, strictly according to the planned boundaries of Nhon Hoi EZ.

The financial regimes specified in this Circular shall only apply to business activities conducted in Nhon Hoi EZ. Where organizations and individuals that conduct business activities in both Nhon Hoi EZ and inland Vietnam, their business activities in Nhon Hoi EZ must be separately accounted to serve as a basis for determining applicable financial regimes.

Foreign-invested enterprises and foreign parties to business cooperation contracts, which had been granted investment licenses; and domestic business establishments, which had been granted certificates of investment preferences in Nhon Hoi EZ before the effective date of the Prime Minister's Decision No. 141/2005/QD-TTg of June 14, 2005 (hereinafter referred to as Decision No. 141/2005/QD-TTg), but have not yet enjoyed all the preferences shall be entitled to preferential policies under this Circular for the remaining preferential duration.

2. Subjects of application:

Subjects of application of this Circular include:

a/ Domestic investors of all economic sectors operating under the provisions of the Law on State Enterprises, the Law on Enterprises and the Law on Cooperatives, individual business households and independent professional practitioners.

b/ Foreign organizations and individuals, including foreign-invested enterprises, foreign investors joining business cooperation contracts, overseas Vietnamese operating under the forms specified in the Law on Foreign Investment in Vietnam, and foreign investors doing business not under the Law on Foreign Investment in Vietnam.

3. Interpretation of terms:

In this Circular, the following terms and phrases are construed as follows:

- The non-tariff area means a geographical area separated from other functional areas of Nhon Hoi EZ by solid fences according to the provisions of Articles 7, 8 and 9 of the Prime Minister's Decision No. 141/2005/QD-TTg of June 14, 2005.

- The functional areas include the industrial park, the population quarters, the urban center, the tourism-service zone, the entertainment and recreation zone and the administrative zone in Nhon Hoi EZ (excluding the export processing zone) demarcated in the master plan of Nhon Hoi EZ approved by the Prime Minister.

- Inland Vietnam means the functional areas in Nhon Hoi EZ and the Vietnamese territory outside Nhon Hoi EZ (excluding areas similar to the non-tariff area and the export processing zone).

- The customs control gates: The non-tariff area has two customs control gates. The customs control gate situated in the contiguous area between the non-tariff port and the tariff port is called gate A, while the one in the contiguous area between the non-tariff port and the inland is called gate B.

- The list of goods originating from the non-tariff area means the list of goods promulgated by the Nhon Hoi EZ Management Board (hereinafter referred to as the Management Board for short) for each period (called the list of goods of the non-tariff area's origin), including goods manufactured, processed, re-processed or assembled in the non-tariff area without the use of raw materials or components imported from abroad.

4. Conditions for application of the financial regimes related to the non-tariff area:

The financial mechanisms related to the non-tariff area in Nhon Hoi EZ shall apply to the non-tariff area only when it ensures all the following conditions:

- It has solid fences isolating activities within it from other functional areas in Nhon Hoi EZ;

- There are no residential quarters and no permanent and temporary residents in it (foreigners alike);

- It has a customs office for supervising and inspecting people, goods and means of transport entering and leaving it.

5. Some general provisions on customs procedures applicable to the non-tariff area:

a/ Organizations and individuals operating in the non-tariff area are allowed to export abroad and import from overseas all goods and/or services not banned by Vietnamese law. Policies on import and export goods items shall comply with the Prime Minister's regulations on management of goods import and export in each period and the guiding documents of the concerned ministries and branches. The import and export of goods on the list of goods subject to conditional import or export, or goods subject to business restrictions shall comply with the Trade Ministry's guidance.

b/ Once every six months, enterprises in the non-tariff area shall have to send to customs offices reports on settlement of supplies, raw materials, materials and goods imported or exported in the period, and reports on warehoused, ex-warehoused and in-stock products. Customs offices shall make comparison and send such reports to tax offices for inspection and determination of payable tax amounts.

c/ Imported, exported or transited cargoes and luggage; means of transport on entry, exit or in transit at the non-tariff area shall be subject to customs order and procedures applicable to their types.

d/ Imported, exported or transited cargoes and luggage; means of transport on entry, exit or in transit through the non-tariff area shall only go through gate A and gate B.

e/ Goods exported from the inland into the non-tariff area and vice versa. Goods imported from overseas through gate B into the non-tariff area shall be subject to customs procedures carried out at gate B; goods from overseas into the non-tariff area and goods from tax suspension area to overseas through gate A shall be subject to customs procedures carried out at gate A.

f/ Goods exported from the inland to overseas through gate A or goods from overseas through gate A into the inland shall be subject to customs procedures carried out under current provisions at gate A or at customs Sub-Departments outside the border-gate. If the procedures are carried out at customs Sub-Departments outside the border-gate, they shall comply with regulations on goods subject to border-gate transfer.

g/ Apart from the above provisions on customs procedures, the concerned parties shall also have to perform other obligations specified in the Customs Law and the Import Tax and Export Tax Law and other documents concerning import and export activities.

6. Principles of investment preferences:

Projects on investment in Nhon Hoi EZ shall enjoy the maximum preferences given to investment projects in geographical areas with exceptionally difficult socio-economic conditions and economic zones according to the provisions of the Law on Foreign Investment in Vietnam, the Law on Domestic Investment Promotion, the Law on Enterprise Income Tax and other tax laws.

Where legal documents provide for preferences at different levels for the same matter, the highest preference level shall apply. Where newly promulgated mechanisms and policies are more preferential than those provided for in this Circular, such new policies shall apply.

II. SPECIFIC PROVISIONS

1. Tax policies applicable to Nhon Hoi EZ:

1.1. Enterprise income tax:

a/ Investment projects of domestic and foreign organizations or individuals for setting up new production and business establishments in Nhon Hoi EZ shall enjoy the enterprise income tax rate of 10% for 15 years after they commence their business; the enterprise income tax exemption for 4 years after they generate taxable incomes; and 50% reduction of payable tax amounts for 9 subsequent years.

b/ Investment projects of domestic and foreign organizations or individuals in Nhon Hoi EZ in the hi-tech domains, which satisfy the conditions in Clause 2, Article 5 of the Government's Decree No. 99/2003/ND-CP of August 28, 2003, promulgating the Regulation on hi-tech parks, shall enjoy the enterprise income tax rate of 10% throughout the project execution duration.

c/ Investment projects of domestic and foreign organizations or individuals in Nhon Hoi EZ, which are of large scale and important significance for the development of branches, domains or socio-economic development of the region, shall enjoy the enterprise income tax rate of 10% throughout the project execution duration after they are approved by the Prime Minister.

d/ For projects on investment in building of new production chains, expansion of production scale, technological renewal, eco-environmental improvement or raising of production capacity, the current legal provisions shall be complied with.

e/ For taxable incomes from transfer of land use rights or land lease rights, the income tax shall be paid under the guidance in Part C of the Finance Ministry's Circular No. 128/2003/TT-BTC of December 22, 2003, guiding the implementation of the Government's Decree No. 164/2003/ND-CP of December 22, 2003, detailing the implementation of the Law on Enterprise Income Tax.

f/ To enjoy the enterprise income tax preferences, organizations and individuals that have investment projects in Nhon Hoi EZ shall have to submit copies of their business registration certificates (for domestic enterprises), investment licenses (for foreign-invested enterprises) to tax offices where such enterprises have made tax payment declaration. The enterprise income tax preferences shall only apply to production and business enterprises which have fully observed the accounting, invoice and voucher regimes and registered and paid taxes according to their declarations.

g/ In the course of operation, if after making tax settlements with tax offices, enterprises suffer from losses, they may carry forward such losses to subsequent years for clearing against their taxable incomes. The duration for carrying forward losses shall not exceed 5 years.

h/ Enterprises shall have to notify the tax offices where they have made tax payment declarations of enterprise income tax exemption or reduction durations specified in this Clause.

1.2. Income tax on high-income earners:

1.2.1. Laborers (Vietnamese and foreigners alike) who work in Nhon Hoi EZ shall enjoy 50% reduction of payable amounts of income tax on high-income earners (hereinafter referred to as personal income tax).

1.2.2. The declaration, payment and settlement of personal income tax shall comply with the current guiding documents on personal income tax. Upon making declarations and temporary payment of personal income tax, income-paying agencies shall withhold 50% of monthly payable personal income tax amounts of laborers working in Nhon Hoi EZ.

1.2.3. Particularly for Vietnamese or foreign laborers who have worked in Nhon Hoi EZ for less than one year (12 months), their reduced personal income tax amounts for the duration of working in Nhon Hoi EZ shall be determined as follows:

a/ For Vietnamese laborers:

Monthly, income-paying agencies shall temporarily withhold 50% of payable personal income tax amounts; and at the year-end, settle tax and calculate payable tax amounts for the whole year and the reduced tax amounts of the year according to the following formula:

Taxable income

Reduced

Payable

in the period of work

personal

personal

in Nhon Hoi EZ

income tax

= income

x 50% x

——————————

amount in

tax amount

Total payable income

the year

in the year

in the taxation year

Of which, the payable personal income tax amount in the year shall be determined on the basis of the total taxable income amount earned in the period of work in Nhon Hoi EZ and the taxable income amount earned in the period of work at other places outside Nhon Hoi EZ.

b/ For foreign laborers:

- If they are non-residents, their payable tax amounts shall be determined as follows:

Payable personal income tax amount = Total taxable income (x) 25% (x) 50%.

- If they are residents, income-paying agencies shall, on the monthly basis, temporarily withhold 50% of payable personal income tax amounts, at the year-end settle tax and calculate payable tax amounts for the whole year and reduced tax amounts. The reduced tax amounts for the year shall be determined according to the formula specified in Item a of this Point.

1.3. Import tax and export tax:

a/ Goods imported or exported in the following cases shall not be liable to import tax or export tax:

- Goods imported from overseas into the non-tariff area; goods exported overseas from the non-tariff area.

- Goods transferred or sold from the non-tariff area to other non-tariff areas (those defined in Clause 1, Article 5 of the 2005 Import Tax and Export Tax Law (amended), export processing enterprises or bonded warehouses, and vice versa.

- Goods not liable to export tax, and originating and brought from inland Vietnam into the non-tariff area.

b/ For goods liable to export tax, and originating and brought from inland Vietnam into the non-tariff area, export tax must be paid and export procedures shall be carried out according to current regulations.

c/ For goods imported from the non-tariff area into inland Vietnam, import tax must be paid according to the following regulations:

- For goods of foreign origin, import tax shall be paid according to current regulations.

- For goods manufactured, processed, re-processed or assembled in the non-tariff area, if the value of portions of ASEAN-origin goods accounts for 40% or more of the total goods value and are evidenced by ASEAN goods origin certificates - form D, the CEPT preferential import tax rate shall apply.

- Goods on the list of goods originating from the non-tariff area, which are brought into the inland, shall be exempt from import tax.

- For goods manufactured, processed, re-processed or assembled in Nhon Hoi EZ with the use of raw materials or components imported directly from overseas (excluding those imported from inland Vietnam and made from raw materials or components imported from overseas), when being imported into inland Vietnam, import tax shall be paid only for portions of raw materials or components imported from abroad which make up such goods.

Bases for determining payable import tax on portions of raw materials or components imported from abroad, which constitute goods imported into inland Vietnam include: tax calculation prices identified according to current regulations; quantities of goods imported into inland Vietnam; import tax rate for each type of raw materials or components; tax calculation prices and tax rates applicable at the time of opening declarations of goods imported into the inland. Business enterprises and individuals shall have to register with customs offices the lists of imported goods for use as raw materials for manufacturing goods to be imported into the inland and consumption norms of raw materials or components used for manufacturing goods before they are imported into the inland.

Value of imported raw materials or components constituting each unit of goods imported into the inland shall be calculated according to the regulations on import tax calculation prices of imported goods at the time of import into the inland.

d/ Projects on investment in production in Nhon Hoi EZ of domestic or foreign organizations or individuals shall be exempt from import tax on production raw materials, supplies, components and semi-finished products, which cannot be made at home, for 5 years after the date of production commencement.

Procedures and dossiers for import tax exemption, declaration and settlement for these cases shall comply with the Finance Ministry's Circular No. 113/2005/TT-BTC of December 15, 2005, guiding the implementation of import tax and export tax.

e/ For production raw materials, supplies and goods imported from abroad by domestic or foreign organizations or individuals engaged in production and/or business activities in the non-tariff area but having not been used up, and inferior-quality products still having a commercial value, which are allowed to be sold into inland Vietnam, after customs procedures therefor are completed, import tax shall be paid according to current regulations.

1.4. Special consumption tax:

a/ For goods and services liable to special consumption tax, which are manufactured and sold within the non-tariff area or imported from abroad into the non-tariff area or vice versa, special consumption tax shall not be paid. Particularly for automobiles of less than 24 seats, special consumption tax shall be paid according to current general regulations.

b/ For goods and services liable to special consumption tax, which are exported from inland Vietnam into the non-tariff area, special consumption tax shall not be paid. Particularly for automobiles of less than 24 seats, special consumption tax shall be paid according to current general regulations.

c/ For goods and services liable to special consumption tax, which are transferred or sold from the non-tariff area to export processing zones or vice versa, special consumption tax shall not be paid.

d/ For goods liable to special consumption tax, which are imported from the non-tariff area into inland Vietnam, special consumption tax on imported goods shall be paid according to current regulations.

1.5. Value-added tax

Enterprises in Nhon Hoi EZ may use value-added invoices according to current regulations, make value-added tax registration, declaration and payment for cases subject to value-added tax payment according to the provisions of this Circular. For goods not liable to value-added tax, the value-added tax lines in value-added invoices shall be crossed out (x). Concretely as follows:

a/ For goods and services manufactured, provided and sold in the non-tariff area and those imported from overseas into the non-tariff area or vice versa, value-added tax shall not be paid.

b/ For goods and services transferred or sold from the non-tariff area to export processing zones or vice versa, value-added tax shall not be paid.

c/ Goods and services exported from inland Vietnam into the non-tariff area shall enjoy the value-added tax rate of 0%.

d/ For goods and services imported from the non-tariff area into inland Vietnam, value-added tax on imported goods shall be paid at the tax rates according to the current regulations.

1.6. Regarding prices, fees, charges and other taxes:

a/ Rent rates and lease rates of land on which technical infrastructures have been built, and levies for use of technical infrastructure works, service and public-utility works in Nhon Hoi EZ shall be determined by enterprises dealing in infrastructure after reaching agreement with the Nhon Hoi EZ Management Board.

b/ Other taxes, fees and charges shall comply with the current provisions of tax laws, the Law on Domestic Investment Promotion (amended), the Law on Foreign Investment in Vietnam, the Ordinance on Charges and Fees and legal documents guiding the implementation thereof.

2. Customs procedures for goods brought into or out of the non-tariff area:

2.1. For goods imported from abroad into the non-tariff area:

a/ Import of goods into the non-tariff area through gate A:

- The non-tariff area enterprises shall have to make customs declarations and submit customs dossiers in strict compliance with current regulations on each mode of goods importation and accordance with the provisions of Point 5, Section I of this Circular.

- Gate-A customs office shall carry out the necessary procedures according to current regulations for each type of goods.

b/ Import of goods into the non-tariff area through gate B shall comply with current regulations on imported goods subject to border-gate transfer.

For goods imported from abroad into inland Vietnam and goods exported overseas from the inland through gate A, current regulations shall be complied with.

For goods exported from the inland into the non-tariff area: Customs offices shall carry out procedures at the request of enterprises. Customs procedures shall be carried out as follows:

- Where inland enterprises register for customs procedures to be carried out at gate-B customs office: Inland enterprises shall have to make customs declarations and submit customs dossiers in strict compliance with current regulations on each mode of goods exportation. In case of internal transportation of goods between enterprises and their branches inside or outside the non-tariff area, purchase and sale contracts may be substituted by ex-warehousing bills. Gate-B customs office shall have to fully carry out export procedures for inland enterprises in strict compliance with regulations on each mode of exportation.

- Where inland enterprises register export declarations at border-gates of exportation under inland customs offices: Customs procedures shall comply with current regulations on exported goods subject to border-gate transfer. Gate-B customs office shall perform professional operations of customs offices of border-gates of exportation on exported goods subject to border-gate transfer (certification of actual exportation).

2.4. For goods exported overseas from the non-tariff area:

a/ For those exported through gate B: Current regulations on exported goods subject to border-gate transfer shall be complied with.

b/ For those exported through gate A: Enterprises shall register for customs procedures to be carried out at gate-A customs office, which shall later carry out customs procedures according to current regulations on exported goods.

2.5. For goods brought from the non-tariff area into the inland:

a/ Goods on the list of goods originating from the non-tariff area shall be exempt from customs procedures but subject to customs declarations of their quantities and customs supervision.

b/ For other goods, customs procedures must be fully carried out, concretely as follows:

- The non-tariff area enterprises (the sellers) shall have to supply to inland enterprises (the buyers) all vouchers, invoices and papers required by customs offices so that the inland enterprises can make customs declarations and submit customs dossiers at gate-B customs office in strict compliance with current regulations on each mode of importation.

- Gate-B customs office shall have to carry out custom procedures for imported goods of inland enterprises according to regulations. Where it detects that foreign goods, which are brought into the non-tariff area for being subsequently imported into the inland, are of the same type with those on the list of goods originating from the non-tariff area and eligible for customs procedures as notified by the Nhon Hoi EZ Management Board, but are not declared by enterprises, gate-B customs office shall request such enterprises to produce evidence to prove the origin of the goods lots; and handle violations, then carry out import procedures for the goods lots according to the provisions of law; and concurrently notify the cases to the Nhon Hoi EZ Management Board for application of management measures or exclusion of such goods from the list of goods originating from the non-tariff area.

2.6. For processed goods:

Customs procedures for goods processed by the non-tariff area enterprises for foreign traders, or processed by inland enterprises hired by the non-tariff area enterprises or vice versa shall comply with current regulations.

2.7. For goods temporarily exported for re-import; goods temporarily imported for re-export; goods transferred from border-gate to border-gate; transited and transported goods:

Imported, exported or transited goods; means of transport on entry, exitor transit through the non-tariff area shall only go through the gates where exist customs control stations. Customs procedures for goods temporarily exported for re-import; goods temporarily imported for re-export; goods transferred from border-gate to border-gate; transited and transported goods in the non-tariff area shall comply with current regulations.

2.8. Apart from complying with the guidance in this Circular, enterprises shall also have to perform other obligations specified in the Customs Law, the Export Tax and Import Tax Law, the Government's Decree No. 101/2001/ND-CP of December 31, 2002, detailing the implementation of a number of articles of the Customs Law on customs procedures, regimes of customs inspection and supervision, and other guiding documents on customs.

3. Regime of rewards to persons with meritorious services in mobilization of domestic and overseas investment capital

3.1. Basing himself/herself on the budget capability, the president of the People's Committee of Binh Dinh province shall decide to reward organizations and individuals that have recorded meritorious services in mobilizing investment capital not originating from the state budget for investment in socio-economic projects in Nhon Hoi EZ on the principle that reward levels for people mobilizing non-refundable investment capital sources are higher than those for people calling for capital in other forms (after obtaining consents of the Finance Ministry). The payment of rewards shall be made after projects commence operation or turn out products for market circulation, and after investors have contributed at least 50% of the pledged legal capital.

3.2. Funds used for rewarding organizations and individuals that have mobilized investment capital (excluding investment capital from the state budget source) for investment in socio-economic projects in Nhon Hoi EZ shall be earmarked from reward funds of local budgets and accounted into the irregular reward expenditure item.

4. Preferences for infrastructure development

4.1. The state budget investment in infrastructure construction

a/ Scope and objects of the state budget investment:

- The state budget shall only provide supports for investment in the construction of socio-technical infrastructures and important service and public-utility works in common service of Nhon Hoi EZ under the target programs incorporated in budget estimates approved by competent authorities. The state budget shall only provide supports for investment in the construction of common infrastructures of the entire Nhon Hoi EZ, excluding infrastructures exclusively reserved for each functional area in Nhon Hoi EZ, unless such infrastructures are concentrated wastewater and waste matter treatment works of the functional areas.

- The state budget's supports for investment in the construction of infrastructures of Nhon Hoi EZ shall be provided according to planned projects approved by competent authorities.

- The Nhon Hoi EZ Management Board, as the locality's planning main body, shall exclusively be allocated capital construction capital from the state budget for construction of infrastructures of Nhon Hoi EZ; shall act as the investor directly managing projects for investment in the construction of infrastructures with the state budget within Nhon Hoi EZ according to the State's current regulations on construction investment management.

b/ Levels of the state-budget supports for investment in infrastructure construction

- Within the first 15 years after the effective date of Decision No. 141/2005/QD-TTg, the annual investment capital from the state budget for construction of infrastructures of Nhon Hoi EZ shall not be lower than the entire source of budget revenues collected in Nhon Hoi EZ and remitted into the State Treasury, including collected export tax, import tax, special consumption tax on imports, enterprise income tax, income tax on high-income earners (excluding value-added tax on imports) and other lawful revenues. Particularly, export tax, import tax and special consumption tax on imports shall only be collected on actually exported or imported goods, for which written declarations or customs inspections have been made in Nhon Hoi EZ and such taxes are remitted into the State Budget in Binh Dinh province. Annually, on the basis of projects for investment in socio-economic infrastructures already approved by competent authorities, the execution progress of such projects, the provisions of the State Budget Law and the estimates of the state budget revenues to be collected in Nhon Hoi EZ, the central state budget shall make targeted supplementary allocations to Binh Dinh province for investment in infrastructures of Nhon Hoi EZ.

- The central state budget's targeted support capital for Binh Dinh province to invest in infrastructures of Nhon Hoi EZ shall be clearly stated in the state budget estimates assigned to Binh Dinh province. Together with the central budget's supports, Binh Dinh province shall incorporate in the annual local budget estimates the capital for investment in infrastructures of Nhon Hoi EZ according to the provisions of Item a of this Point.

c/ Revenues generated in the area shall be remitted into the state budget. The division of revenues between the central budget and the local budget shall comply with the current provisions of law. The Nhon Hoi EZ Management Board shall coordinate with tax, state treasury and customs offices in the area in figuring out revenue amounts actually collected in the area which shall serve as a basis for working out annual plan on capital construction investment capital for projects of Nhon Hoi EZ.

d/ The management and use of capital invested by the central budget in construction of infrastructures of Nhon Hoi EZ.

Capital invested by the central budget in construction of infrastructure of Nhon Hoi EZ shall be managed and used according to the regulations on capital construction investment management, the State Budget Law and current guiding documents. Annually at the time of making the state budget estimates, the Nhon Hoi EZ Management Board shall coordinate with concerned agencies in determining the central budget's revenues from export tax, import tax and special consumption tax on imports in Nhon Hoi area for purpose of making annual estimates of capital construction investment expenditures according to the list of investment projects approved by competent authorities, then sending them to the Planning and Investment Ministry and the Finance Ministry for sum-up and report to the Government for subsequent submission to the National Assembly for decision.

4.2. Regime of using land fund for creation of infrastructure development capital:

The Management Board shall act as the main body which is assigned annual plan targets and as the investor directly managing projects using capital from the land fund in Nhon Hoi EZ; organize bidding to select units which have financial capability, experience and prestige for the execution of infrastructure projects invested with capital from the land fund in Nhon Hoi EZ.

The Management Board shall draw up a list of infrastructure construction investment projects entitled to use the land fund for capital creation and areas of land plots used therefor, then submit it to the People's Committee of Binh Dinh province for submission to the provincial People's Council or decision according to its competence.

The use of the land fund for creation of capital for construction of infrastructures of Nhon Hoi EZ shall comply with the Government's Decree No. 181/2004/ND-CP of October 29, 2004 on implementation of the Land Law, and regulations concerning the use of land fund for creation of capital for infrastructure construction.

4.3. Mobilization of capital by issuance of project bonds:

The People's Committee of Binh Dinh province may issue domestic project bonds to mobilize capital for construction of infrastructures of Nhon Hoi EZ. The issuance of project bonds by the People's Committee of Binh Dinh province shall comply with the provisions of the Government's Decree No. 141/2003/ND-CP of November 20, 2003, promulgating the Regulation on issuance of government bonds, government-guaranteed bonds and local administration bonds, and other modes of capital mobilization provided for by law.

4.4. Investment in infrastructures with ODA capital and other capital sources:

Other infrastructure works of Nhon Hoi EZ shall be put on the list of projects calling for ODA capital and capital mobilized by other modes according to the provisions of Article 21 of the Nhon Hoi EZ Regulation promulgated together with the Prime Minister's Decision No. 141/2005/QD-TTg of June 14, 2005.

5. Preferential credit regime:

Domestic enterprises of all economic sectors which invest in production and business in Nhon Hoi EZ shall be considered for state preferential credit loans from the Development Assistance Fund according to the current regulations on state development investment credit.

6. Financial regime applicable to the Nhon Hoi EZ Management Board:

The Management Board is a local budget-estimating unit, with its activities being financed by the local budget. All revenues collected by the Management Board according to regulations must be remitted into the state budget.

The Management Board is allowed to collect assorted charges and fees for performance of tasks authorized by state management agencies under current regulations. When being authorized by competent state agencies to perform the collecting task, it shall have to notify and register with the tax office of the locality where it is headquartered of the remittance of collected charge and fee amounts for performance of the said tasks and carry out procedures therefor.

III. ORGANIZATION OF IMPLEMENTATION

This Circular takes effect 15 days after its publication in "CONG BAO."

2. The Nhon Hoi EZ Management Board shall coordinate with tax and customs offices and the State Treasury office where its account is opened in separately monitoring the revenues guided in Item b, Point 4.1, Section II of this Circular to satisfy the management requirements and serve the formulation of capital construction investment capital plans.

3. The Customs Department of Binh Dinh province shall have the responsibilities:

- To organize the fight against smuggling and trade frauds, and the prevention of illegal import of goods from the non-tariff area into the inland and other areas under its management.

- To coordinate with the Nhon Hoi EZ Management Board and concerned agencies (tax, police, border guards) in undertaking the fight against smuggling and trade frauds, and the prevention of illegal import of goods from the non-tariff area into the inland.

4. The customs office of the non-tariff area shall perform the task of inspecting and supervising goods and means of transport, the prevention of and fight against smuggling and illegal cross-border transportation of goods; organize the enforcement of the laws on taxes on exported and imported goods; organize customs stations under regulations which are suitable with geographical characteristics of the non-tariff area for well performing their assigned tasks.

5. The General Department of Customs shall:

- Base itself on this Circular's provisions on customs procedures to elaborate a detailed regulation on customs procedures and processes applicable to the non-tariff area, and report it to the Finance Ministry before promulgation.

- Set up the Customs Sub-Department of Nhon Hoi EZ under the Customs Department of Binh Dinh province to perform the customs tasks in Nhon Hoi EZ.

6. The State Treasury office in Nhon Hoi EZ shall separately monitor revenues which need to be monitored in detail at the request of the Nhon Hoi EZ Management Board on the principle that such monitoring activity is compatible with the State Treasury's management operations.

7. The Department of Taxation of Binh Dinh province shall have to guide enterprises in implementing Item h, Point 1.1, Section II of this Circular.

8. All problems arising in the course of implementation should be reported to the Finance Ministry for study and additional guidance.